State of Crowdfunding in the Government

In recent years, local governments have been increasingly partnering with crowdfunding sites to fund and support public projects, especially in light of shrinking budgets.  These crowdfunding sites include: Neighbor.ly, based in Kansas City; Citizinvenstor, which started in Tampa but has now expanded to Philadelphia and Boston; and Patronhood, which focuses on San Francisco, New York, and Montreal.  These are only a few of the numerous civic crowdfunding sites that have sprung up over the past year.

Civic crowdfunding sites support projects that have been approved by the local government, but do not have the funding to be implemented.  Campaigns on the sites include bike share systems, street cars and public transportation, parks and green spaces, and monuments and structures.  These crowdfunding sites have been largely successful not only because they have been able to raise needed funds, but also because they have been able to engage and connect communities.

In conjunction with civic crowdfunding platforms, local governments themselves are beginning to designate personnel and offices to implement innovative projects.  In Boston, for example, New Urban Mechanics is the city’s innovation office supported by the municipal government.  The office builds partnerships between city agencies, outside institutions, and entrepreneurs to pilot civic projects.  The city strongly supports the role that civic crowdfunding sites, like Citizinvestor, have in strengthening community ties.

On the federal level, the government is using crowdsourcing to foster innovation. Challenge.gov, for example, is a place for the public to offer their ideas or finished products to solve tough problems that the government faces.  Crowdsourcing sites, such as Innocentive.com and IdeaScale.com, have also become increasingly popular in the government market because they are able engage the public, help spur innovation, and provide new insights to government officials.  These sites help the government to gain access to talent at a relatively low cost.

Government, at both the local and federal level, is using crowdsourcing to engage the public and connect communities.  In the process, it is able to gain new ideas and fund projects. Citizens are able to voice their opinions and make decisions that affect their communities.

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